Torun Center Development Valuation Report Prepared on behalf of Torunlar GYO 31 December 2012 www.dtz.com/tr This Report titled “Torun Center Development Valuation Report Update” has been prepared by DTZ Pamir & Soyuer, as requested by Torunlar Gayrimenkul Yatırım Ortaklığı A.Ş. DTZ Debenham Tie Leung International Property Advisers is exclusively represented in Turkey by Pamir ve Soyuer Gayrimenkul Danışmanlık A.Ş. (“DTZ Pamir & Soyuer”). The mailing address of Pamir & Soyuer is presented below: Hakkı Yeten Caddesi 15/7 Şişli - İstanbul 34365 Phone : +90 (212) 231 5530 Fax : +90 (212) 231 5820 E-mail : [email protected] Executive contacted for the purposes of this Report is: Prepared by: Fadime Coban, Urban Planner, M.Sc. in Real Estate Development CMB Licensed Valuer Manager/Advisory Services (e-mail: [email protected]) Reviewed by: Firuz Soyuer, MBA, MRICS Managing Partner We do not guarantee the fulfillment of any estimates contained within this report, although they have been conscientiously prepared on the basis of our own research and information made available to us. The report may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without our prior written consent. www.dtz.com/tr TABLE OF CONTENTS I. EXECUTIVE SUMMARY ......................................................................................................................... 1 II. INTRODUCTION ....................................................................................................................................... 2 A. INSTRUCTION ............................................................................................................................................ 2 B. PURPOSE OF VALUATION .......................................................................................................................... 2 C. BASIS AND DEFINITION OF VALUATION .................................................................................................... 2 D. MARKET VALUE ....................................................................................................................................... 2 E. DEFINITION OF VALUE .............................................................................................................................. 2 1. Definitions ........................................................................................................................................... 2 2. Market Value ....................................................................................................................................... 2 F. APPROACHES TO VALUATION ................................................................................................................... 3 G. ASSUMPTIONS AND SOURCES OF INFORMATION ........................................................................................ 4 H. HIGHEST AND BEST USE ASSESSMENT ...................................................................................................... 4 I. APPROACH & METHOD ............................................................................................................................. 5 J. DATE OF VALUATION ................................................................................................................................ 5 K. CURRENCY EXCHANGE RATES .................................................................................................................. 5 III. ISTANBUL GENERAL INFORMATION .......................................................................................... 6 A. GENERAL OVERVIEW ................................................................................................................................ 6 B. POPULATION ............................................................................................................................................. 6 C. TRANSPORTATION ..................................................................................................................................... 7 D. ECONOMY ................................................................................................................................................. 9 IV. İSTANBUL PROPERTY MARKETS ............................................................................................... 11 A. RETAIL MARKET ................................................................................................................................... 11 B. OFFICE MARKET ................................................................................................................................... 12 C. RESIDENTIAL MARKET ......................................................................................................................... 14 V. REAL ESTATE TRENDS IN THE AREA ............................................................................................. 16 A. RESIDENTIAL MARKET IN THE AREA ...................................................................................................... 16 B. RETAIL MARKET IN THE AREA ................................................................................................................ 17 C. OFFICE DEVELOPMENTS IN THE AREA .................................................................................................... 19 VI. TORUN CENTER PROJECT (ALİ SAMİ YEN PROPERTY) ...................................................... 25 A. LOCATION, ACCESSIBILITY & ENVIRONS ................................................................................................ 25 B. DESCRIPTION OF THE PROPERTY ............................................................................................................. 27 C. LEGAL DESCRIPTION OF THE PROPERTY ................................................................................................. 28 Deed Registry Records ................................................................................................................................ 28 Encumbrances ............................................................................................................................................. 28 Zoning ......................................................................................................................................................... 29 Proposed Development ............................................................................................................................... 30 VII. VALUATION ....................................................................................................................................... 32 A. COMMENTS / EXPLANATION / METHODOLOGY........................................................................................ 32 B. VALUATION OF THE PROPERTY ............................................................................................................... 32 1. Construction Area ............................................................................................................................. 32 2. Project Timing ................................................................................................................................... 32 3. Construction Costs ............................................................................................................................ 33 4. Soft Costs ........................................................................................................................................... 33 5. Infrastructure Cost ............................................................................................................................ 33 6. Residential Component Assumptions ................................................................................................. 33 7. Office Component Assumptions ......................................................................................................... 34 8. Retail Assumptions ............................................................................................................................ 34 9. Discount Rate .................................................................................................................................... 36 10. Cost Spent to Date ............................................................................................................................. 36 11. Landowner’s Share – Revenue Share Model ..................................................................................... 36 12. Conclusion ......................................................................................................................................... 37 i VIII. APPENDICES ...................................................................................................................................... 38 A. VALUATION TERMS AND CONDITIONS .................................................................................................... 38 B. TITLE ...................................................................................................................................................... 38 C. ENVIRONMENTAL MATTERS ................................................................................................................... 38 D. STATUTORY REQUIREMENTS AND PLANNING ......................................................................................... 38 E. INFORMATION ........................................................................................................................................